NEW YORK--(BUSINESS WIRE)--Twelfth paragraph, starting at the second line should read: As of
March 31, 2014, the Company had entered into interest rate swap
contracts with an aggregate notional amount of $5.8 billion, a weighted
average fixed rate of 1.09%, and a weighted average expiration of 3.5
years. The receive rate on the Company's interest rate swaps is three
month LIBOR. At March 31, 2014, the Company had entered into interest
rate cap contracts with a notional amount of $3.9 billion, a weighted
average cap rate of 1.40%, and a weighted average expiration of 5.1
years.

The corrected release reads:

CYS INVESTMENTS, INC. ANNOUNCES FIRST QUARTER 2014 FINANCIAL RESULTS

CYS Investments, Inc. (NYSE: CYS) (“CYS” or the “Company”) today
announced financial results for the quarter ended March 31, 2014.

First Quarter 2014 Summary Results

March 31, 2014 book value per common share of $9.68 after declaring a
$0.32 dividend per common share on March 10, 2014.

March 31, 2014 leverage ratio of 6.32 to 1.

GAAP net income available to common shares of $125.5 million, or $0.78
per diluted common share.

Weighted average amortized cost of Agency RMBS and U.S. Treasury
Securities of $102.53.

Constant Prepayment Rate of 5.6% for the quarter.

Market Commentary

Much of the interest rate volatility in the latter part of 2013 reversed
in the first quarter of 2014. As the calendar turned, the year end
selling pressures in many markets waned, and the markets quickly
repriced to consensus levels without perennial year-end distortions.
Agency RMBS rallied through the first quarter of 2014, and the 10 year
U.S. Treasury seemed to find a stable equilibrium of approximately
2.75%, or 250 basis points above the Federal Funds Target Rate ("Fed
Funds"). This yield curve steepness is consistent with the past 40 years
of history: when the market senses a tightening by the U.S. Federal
Reserve (the "Fed") on the horizon, the 10 year Treasury often finds
equilibrium at 250 to 300 basis points above Fed Funds. The recovery in
the bond market helped our book value per common share rise over the
quarter and also provided us an opportunity to adjust the risk profile
of our assets. We reduced the interest rate risk of our assets by
reducing leverage and reducing our holdings of 30 year fixed rate Agency
RMBS. With the Fed continuing to taper their asset purchases, we
anticipate Agency RMBS will cheapen later in the year and have prepared
the Company’s balance sheet to take advantage of this scenario. Despite
the lower leverage, we continue to expect our portfolio to generate
attractive earnings, and we expect to see an opportunity later in the
year to deploy more of our capital at higher yields.

Should our market volatility hypotheses materialize, we would expect to
see a more favorable investing environment as the year advances. At the
same time, however, we remain alert and prepared for continued interest
rate environment and book value per common share volatility.

Leverage & Liquidity

The Company reduced its leverage during the first quarter to minimize
the potential adverse impacts of expected volatility in interest rates,
ending the first quarter of 2014 with a leverage ratio of 6.32 to 1,
compared to 6.97 to 1 at December 31, 2013.

At March 31, 2014, the Company’s liquidity position, consisting of
unpledged Agency RMBS, U.S. Treasuries and cash and cash equivalents,
was approximately $1.4 billion, or 75.3% of stockholders' equity,
compared to $1.1 billion, or 63.1% of stockholders' equity at
December 31, 2013.

Portfolio

During the first quarter of 2014, the Company reduced its Agency RMBS
portfolio from $13.9 billion at December 31, 2013 to $11.8 billion at
March 31, 2014 and added $1.5 billion of U.S. Treasuries. The Company
made this tactical adjustment in order to reduce its duration gap,
improve its liquidity and be in better position to take advantage of a
possible cheapening of the Agency RMBS market, as the Fed continues to
taper its asset purchase activities. The following table details the
Company's Agency RMBS and U.S. Treasury portfolio ("Debt Securities") at
December 31, 2013 and March 31, 2014.

March 31, 2014

December 31, 2013

Fair Value (in billions)

% of Total

Fair Value (in billions)

% of Total

15 Year Fixed Rate

$

6.4

48%

$

6.5

47%

20 Year Fixed Rate

0.1

1%

0.1

1%

30 Year Fixed Rate

3.3

24%

5.2

37%

Hybrid ARMs

2.0

15%

2.1

15%

U.S. Treasury Securities

1.5

12%

—

—%

Total

$

13.3

100%

$

13.9

100%

The Company’s March 31, 2014 Debt Securities are summarized below:

Face Value

Fair Value

Weighted Average

Asset Type

(in thousands)

Cost/Face

Fair Value/Face

Yield(1)

Coupon

CPR(2)

15 Year Fixed Rate

$

6,227,169

$

6,432,461

$

102.58

$

103.30

2.31%

3.13%

5.6%

20 Year Fixed Rate

81,294

87,371

103.04

107.48

1.94%

4.50%

11.5%

30 Year Fixed Rate

3,149,975

3,263,950

103.24

103.62

3.32%

3.96%

4.1%

Hybrid ARMs (3)

1,946,543

1,986,641

103.55

102.06

1.98%

2.56%

9.5%

U.S. Treasury Securities

1,550,000

1,537,312

99.61

99.18

1.68%

1.50%

NA

Total

$

12,954,981

$

13,307,735

$

102.53

$

102.72

2.43%

3.06%

6.1%

__________

(1) This is a forward yield and is calculated based on the
cost basis of the security at March 31, 2014.

(2) CPR is a method of expressing the prepayment rate for a
mortgage pool that assumes that a constant fraction of the remaining
principal is prepaid each month or year. Specifically, the constant
prepayment rate is an annualized version of the prior three month
prepayment rate for those bonds held at March 31, 2014. Securities with
no prepayment history are excluded from this calculation.

(3) The weighted average months to reset of our Hybrid ARM
portfolio was 63.2 at March 31, 2014. Months to reset is the number of
months remaining before the fixed rate on a Hybrid ARM becomes a
variable rate. At the end of the fixed period, the variable rate will be
determined by the margin and the pre-specified caps of the Hybrid ARM
and will reset annually.

First Quarter 2014 Results

The Company had net income available to common shares of $125.5 million
during the first quarter of 2014, or $0.78 per diluted common share,
compared to net loss of $97.1 million, or $0.59 per diluted common
share, in the fourth quarter of 2013. During the first quarter of 2014,
the Company had Core Earnings plus Drop Income of $56.7 million, or
$0.35 per diluted common share (Core Earnings of $45.1 million, or $0.28
per diluted common share, and Drop Income of $11.6 million, or $0.07 per
diluted common share), compared to $62.3 million, or $0.38 per diluted
common share (Core Earnings of $49.5 million, or $0.31 per diluted
common share, and Drop Income of $12.8 million, or $0.07 per diluted
common share), in the fourth quarter of 2013.

The Company’s interest rate spread net of hedge including Drop Income
was 1.89% for the first quarter of 2014, unchanged from the fourth
quarter of 2013.

The Company had a net realized and unrealized gain from investments of
$105.9 million, which included $16.7 million of net realized gain for
the first quarter of 2014, compared to a net realized and unrealized
loss from investments of $190.3 million, which included $22.7 million of
net realized loss, for the fourth quarter of 2013.

The Company’s book value per common share on March 31, 2014 was $9.68,
after declaring a $0.32 dividend per common share on March 10, 2014,
compared to $9.24 at December 31, 2013.

The Company’s operating expenses were $5.8 million, or 1.25% of average
stockholders' equity, for the first quarter of 2014, compared to $4.2
million, or 0.89% of average stockholders' equity, for the fourth
quarter of 2013. During the fourth quarter of 2013 the Company had lower
operating expenses, primarily due to an adjustment to the incentive
compensation accrual as the Company finalized its 2013 incentive
compensation determinations/awards.

(in thousands)

Three Months Ended

Key Balance Sheet Metrics

March 31, 2014

December 31, 2013

Average settled Debt Securities (1)

$

12,472,238

$

13,024,294

Average total Debt Securities (2)

$

13,454,972

$

14,293,267

Average repurchase agreements (3)

$

10,867,627

$

11,384,159

Average Debt Securities liabilities (4)

$

11,850,361

$

12,653,132

Average stockholders' equity (5)

$

1,861,121

$

1,896,360

Average common shares outstanding (6)

161,831

163,850

Leverage ratio (at period end) (7)

6.32:1

6.97:1

Key Performance Metrics*

Average yield on settled Debt Securities (8)

2.71

%

2.82

%

Average yield on total Debt Securities including Drop Income (9)

2.85

%

2.93

%

Average cost of funds and hedge (10)

1.04

%

1.15

%

Adjusted average cost of funds and hedge (11)

0.96

%

1.04

%

Interest rate spread net of hedge (12)

1.67

%

1.67

%

Interest rate spread net of hedge including Drop Income (13)

1.89

%

1.89

%

Operating expense ratio (14)

1.25

%

0.89

%

__________

(1) The average settled Debt Securities is calculated by averaging the
month end cost basis of settled Debt Securities during the period.(2)
The average total Debt Securities is calculated by averaging the month
end cost basis of total Debt Securities during the period.(3) The
average repurchase agreements are calculated by averaging the month end
repurchase agreements balance during the period.(4) The average
Debt Securities liabilities are calculated by adding the average month
end repurchase agreements balance plus average unsettled Debt Securities
during the period.(5) The average stockholders' equity is
calculated by averaging the month end stockholders' equity during the
period.(6) The average common shares outstanding are calculated by
averaging the daily common shares outstanding during the period.(7)
The leverage ratio is calculated by dividing (i) the Company's
repurchase agreements balance plus payable for securities purchased
minus receivable for securities sold by (ii) stockholders' equity.(8)
The average yield on Debt Securities for the period is calculated by
dividing total interest income by average settled Debt Securities.(9)
The average yield on total Debt Securities including Drop Income for the
period is calculated by dividing total interest income plus Drop Income
by average total Debt Securities.(10) The average cost of funds
and hedge for the period is calculated by dividing interest expense by
average repurchase agreements.(11) The adjusted average cost of
funds and hedge for the period is calculated by dividing interest
expense by average Debt Securities liabilities.(12) The interest
rate spread net of hedge for the period is calculated by subtracting
average cost of funds and hedge from average yield on settled Debt
Securities.(13) The interest rate spread net of hedge including
Drop Income for the period is calculated by subtracting adjusted average
cost of funds and hedge from average yield on total Debt Securities
including Drop Income.(14) The operating expense ratio for the
period is calculated by dividing operating expenses by average
stockholders' equity.

* All percentages are annualized.

Financing

At March 31, 2014, the Company had financed its portfolio with
approximately $10.0 billion of borrowings under repurchase agreements
with a weighted average interest rate of 0.31% and a weighted average
maturity of approximately 43.4 days. In addition, the Company had
payable for securities purchased net of receivable for securities sold
of $1.6 billion. This compared to $11.2 billion of borrowings under
repurchase agreement with a weighted average interest rate of 0.41% and
a weighted average maturity of approximately 39.9 days and $1.1 billion
of payable for securities purchased net of receivable for securities
sold at December 31, 2013. During the first quarter of 2014, the Company
did not experience material changes in the availability of repurchase
agreement borrowings or to haircuts on the Agency RMBS and U.S. Treasury
Securities that the Company uses as collateral for such borrowings. The
Company has taken steps to minimize its counterparty risk by
establishing relationships across the globe, and diversifying borrowings
across those counterparties. For example, at March 31, 2014, the Company
did not have repurchase agreements outstanding with any one counterparty
greater than 7% of the total outstanding borrowings. Below is a summary
by region, of outstanding borrowings under repurchase agreements at
March 31, 2014 (dollars in thousands):

Counterparty Region

Number of Counterparties

Total Outstanding Borrowings

% of Total

North America

13

$

4,835,974

48.3%

Europe

8

3,070,489

30.7%

Asia

5

2,107,585

21.0%

Total

26

$

10,014,048

100.0%

Hedging

The Company utilizes interest rate swap and cap contracts to hedge the
interest rate risk associated with the financing of its Agency RMBS and
U.S. Treasury Securities portfolio. As of March 31, 2014, the Company
had entered into interest rate swap contracts with an aggregate notional
amount of $5.8 billion, a weighted average fixed rate of 1.09%, and a
weighted average expiration of 3.5 years. The receive rate on the
Company's interest rate swaps is three month LIBOR. At March 31, 2014,
the Company had entered into interest rate cap contracts with a notional
amount of $3.9 billion, a weighted average cap rate of 1.40%, and a
weighted average expiration of 5.1 years. The Company's interest rate
swap and cap contracts outstanding at March 31, 2014 are described below
(dollars in thousands):

Interest Rate Swaps

Weighted Average

Notional

Fair

Expiration Year

Fixed Pay Rate

Amount

Value

2016

1.71%

$

550,000

$

(12,320

)

2017

0.94%

3,250,000

27,981

2018

1.16%

2,000,000

23,842

Total

1.09%

$

5,800,000

$

39,503

Interest Rate Caps

Weighted Average

Notional

Fair

Expiration Year

Cap Rate

Amount

Value

2015

1.40%

$

500,000

$

165

2019

1.56%

1,700,000

80,144

2020

1.25%

1,700,000

123,943

Total

1.40%

$

3,900,000

$

204,252

Drop Income

Drop Income is a component of our net realized and unrealized gain
(loss) on investments on our consolidated statements of operations, and
is therefore excluded from Core Earnings. Drop Income is the difference
between the spot price and the forward settlement price for the same
security on trade date. This difference is also the economic equivalent
of the assumed net interest margin (yield minus financing costs) of the
bond from trade date to settlement date. The Company derives Drop Income
through utilization of forward settling transactions.

The Company had Drop Income of $11.6 million, or $0.07 per diluted
common share during the first quarter of 2014, compared to $12.8
million, or $0.07 per diluted common share, in the fourth quarter of
2013.

Prepayments

The portfolio recorded $279.8 million in scheduled and unscheduled
principal repayments and prepayments, which equated to a constant
prepayment rate (“CPR”) of approximately 5.6% and net amortization of
premium of $10.3 million for the first quarter of 2014. This compared to
$304.7 million in scheduled and unscheduled principal repayments and
prepayments, which equated to a CPR of approximately 5.7% and net
amortization of premium of $11.3 million for the fourth quarter of 2013.

The CPR of the Company’s Agency RMBS portfolio was approximately 7.6%
for the month of April 2014.

Dividend

The Company declared a common dividend of $0.32 per share for the first
quarter of 2014, unchanged from the fourth quarter of 2013. Using the
closing share price of $8.26 on March 31, 2014, the first quarter
dividend equates to an annualized dividend yield of 15.5%.

Share Repurchase Program

In November 2012, the Company's board of directors authorized the
repurchase of shares of common stock having an aggregate value of up to
$250 million. During the first quarter of 2014, the Company did not
repurchase any shares. This compared to repurchases of 5.2 million
shares with a weighted average purchase price of $8.28 per share, or
approximately $43.3 million in the aggregate for the fourth quarter of
2013. These purchases were accretive to the Company's stockholders'
equity at the time the shares were repurchased.

Conference Call

The Company will host a conference call at 9:00 AM Eastern Time on
Tuesday, April 22, 2014, to discuss its financial results for the
quarter ended March 31, 2014. To participate in the call by telephone,
please dial 800.708.4539 at least 10 minutes prior to the start time and
reference the conference passcode 37084642. International callers should
dial 847.619.6396 and reference the same passcode. The conference call
will also be webcast live over the Internet and can be accessed at the
Company’s web site at http://www.cysinv.com.
To listen to the live webcast, please visit http://www.cysinv.com
at least 15 minutes prior to the start of the call to register,
download, and install necessary audio software.

A dial-in replay will be available on Tuesday, April 22, 2014, at
approximately 12:00 PM Eastern Time. To access this replay, please dial
888.843.7419 and enter the conference ID number 37084642#. International
callers should dial 630.652.3042 and enter the same conference ID
number. A replay of the conference call will also be archived on the
Company’s website at http://www.cysinv.com.

Additional Information

The Company will make available additional quarterly information for the
benefit of its stockholders through a supplemental presentation that
will be available at the Company's website, www.cysinv.com,
contemporaneously with the filing of the Company's quarterly report on
Form 10-Q. The presentation will be available on the
Webcasts/Presentations tab of the Investor Relations section of the
Company's website.

About CYS Investments, Inc.

CYS Investments, Inc. is a specialty finance company that primarily
invests on a leveraged basis in residential mortgage pass-through
certificates for which the principal and interest payments are
guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. The Company refers
to these securities as Agency RMBS. CYS Investments, Inc. has elected to
be taxed as a real estate investment trust for federal income tax
purposes.

Forward-Looking Statements Disclaimer

This Current Report on Form 8-K contains “forward-looking statements”
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including those relating to interest rate
volatility, the prices of Agency RMBS, earnings, deployment of capital,
yields, investment environment, book value per common share, forward
settling transactions, forward yield, and the effect of actions of the
U.S. government, including the Fed, on our results. Forward-looking
statements typically are identified by use of the terms such as
“believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,”
“intend,” “should,” “may” or similar expressions. Forward-looking
statements are based on the Company's beliefs, assumptions and
expectations of the Company's future performance, taking into account
all information currently available to the Company. The Company cannot
assure you that actual results will not vary from the expectations
contained in the forward-looking statements. All of the forward-looking
statements are subject to numerous possible events, factors and
conditions, many of which are beyond the control of the Company and not
all of which are known to the Company, including, without limitation,
market conditions and those described in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2013, which has been
filed with the Securities and Exchange Commission. All forward-looking
statements speak only as of the date on which they are made. New risks
and uncertainties arise over time, and it is not possible to predict
those events or how they may affect us. Except as required by law, the
Company is not obligated to, and does not intend to, update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise.

Core Earnings represents a non-GAAP financial measure and is defined as
net income (loss) available to common shares excluding net realized gain
(loss) on investments, net unrealized gain (loss) on investments, net
realized gain (loss) on termination of swap and cap contracts and net
unrealized gain (loss) on swap and cap contracts. Management uses Core
Earnings to evaluate the effective yield of the portfolio. In addition,
management utilizes Core Earnings as a key metric in conjunction with
other portfolio and market factors to determine the appropriate leverage
and hedging ratios, as well as the overall structure of the portfolio.

The primary limitation associated with Core Earnings as a measure of the
Company's financial performance over any period is that it excludes the
effects of net realized and unrealized gain (loss) on investments and
swap and cap contracts. In addition, the Company's presentation of Core
Earnings may not be comparable to similarly-titled measures of other
companies, which may use different calculations. As a result, Core
Earnings should not be considered as a substitute for the Company's GAAP
net income (loss) as a measure of our financial performance or any
measure of our liquidity under GAAP.